Information Asymmetry is a theory that relates to the data breach letter. This theory suggests that one party in economic transactions has better information than the other. In this case glashwasherparts.com had more information about the data breach than the customers could have known. This letter reduced the information asymmetry by informing customers of the breach. Reputation economics is another theory connected to the letter which suggests that a company’s reputation is a valuable asset that impacts its economic importance. Glasswasher parts is attempting to maintain this reputation with the letter. Social exchange theory is a social science theory that suggest that social behavior results from an exchange process aimed at maximizing the benefits and minimizing the costs. This letter is a way to maintain a positive relationship with customers to balance the cost of data breach with technical support. Risk society theory suggests that societies are preoccupied with risks that escape the control mechanisms of society. The letter emphasizes future risks such as identity theft and how to mitigate it which aligns with this theory.
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